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Define and Design with Your Friend in Finance

Updated: Sep 18, 2024



Retirement is approaching - How are you feeling?

Whether you are completely prepared or starting to feel the pressure, we have a short guide to ease the process:


Step 1: Define your goals and design your plan


Let's face it, establishing long-term financial goals can be daunting. Envisioning a life event like retirement can be a harrowing task. If this sounds familiar, rest assured, you're not alone. Many of us didn't have the opportunity to learn about financial planning or how to strike a balance between enjoying life today and saving for the future. But here's the good news – you can absolutely overcome these challenges and take control of your financial future.

Why are people hesitant to set retirement goals?

  1. Unlike tangible assets such as houses or cars, retirement is hard to grasp as it's far away and that presents challenges in both saving for it and envisioning it.

  2. The uncertainty surrounding the required retirement savings amount leaves us in a quandary about the necessary present-day savings.

  3. With the necessary cash flow uncertain, it becomes challenging to determine our current saving capacity.

Given the ambiguity surrounding these factors, our tendency is often to remain inactive. However, a more prudent approach is to learn smart financial habits:

  • Define Your Savings Goals: To begin, it's crucial to determine how much you should save for your retirement. While a common guideline suggests saving at least 10-12 times your current income, it's important to recognize that this is just a starting point. For many individuals, this estimate may fall short of their actual needs. To establish a more accurate figure, consider consulting with a financial planner who can tailor your retirement savings goal to your unique circumstances.

  • Prioritizing Your Future Self: In your financial journey, treat your future self as your most significant expense. Embrace the practice of paying yourself first by allocating a portion of your income towards retirement before addressing other financial obligations. Even if your initial contributions are modest, this habit is exceptionally valuable and should be adopted early on in life or at any stage of your financial journey.

  • Design a Simplified Plan: To pave the way towards your retirement goals, create a straightforward plan with a focus on the next 6-12 months. The key is to initiate your journey – action is paramount. Remember that you can always fine-tune and adjust your plan as circumstances evolve. The essential step is to get started on the path toward securing your financial future.


Step 2: The early bird gets the compound interest worm

  • Taking the First Step Towards Retirement Investing:

Now is the perfect time to embark on your retirement investment journey, even if you're beginning with modest contributions. If you find it nearly impossible to save, start with allocating 1% of your paycheck towards retirement this year. As you progress, aim to increase this percentage by one point each year.

  • The Value of Early Action: To underscore the significance of commencing early, consider this insight from Darwin's Finance, a respected authority in the field. Their analysis reveals that a 25-year-old who saves $1,000 per month until the age of 35 will ultimately accumulate a more substantial retirement fund compared to a 35-year-old who saves the same amount each month but continues until age 65.

  • The Key Takeaway: The lesson here is that not everyone can set aside $1,000 each month, particularly at the age of 25. However, the crucial point is to begin your investment journey today. Even if your capacity to save is limited due to other financial priorities such as debt, education expenses, buying a new home, or managing daily life expenses, initiating the process early allows your money more time to grow and work for your future financial well-being.

Step 3: Find your friend in Finance

The simultaneous pursuit of retirement savings, a new home, and the ever-important college funds for our children, all while tackling debt can feel like a juggling act. These are substantial decisions with long-lasting implications. If you're nearing retirement age, the stakes become even higher.

But guess what? You don't have to tackle this puzzle on your own. Enlisting the guidance of an advisor can be a game-changer. Their expertise spans a wide array of financial domains, including investments, taxes, estate planning, and more. With their support, you can find the right balance for your financial life, gain clarity and confidence, and, perhaps most importantly, significantly reduce stress along the way. It's all about making your financial journey smoother and more enjoyable.

Our advisors can help you establish a plan, avoid excessive fees, and manage the greatest risks in retirement:

  • Investment performance - what kind of investments are right for you?

  • Inflation - are your investments keeping up with rising costs?

  • Longevity - are you investing soon enough? Is compounding your friend?

  • Unexpected events - are you ready for life's surprises?

Let's talk about the big picture:

Retirement might seem like a far-off destination, but it's essential to realize that the journey starts today. Keep your retirement plan straightforward, well-rounded, and filled with purpose. Remember, it's all about balance. Just like savoring a well-cooked meal, it's essential to enjoy every aspect of your financial life in moderation. Focus on what truly matters to you and align your goals accordingly.

Here's the secret sauce: Don't hesitate to seek guidance from a financial expert. Their knowledge and experience can be a game-changer on your financial journey. So, let's embark on this adventure together and make your future retirement as bright as it can to begin your investment journey today. Even if your capacity to save is limited due to other financial priorities such as debt, education expenses, buying a new home, or managing daily life expenses, initiating the process early allows your money more time to grow and work for your future financial well-being.


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